An Empirical Investigation on the Great Gatsby's CurveManuscript (2106)
Cross country evidence suggests a negative relation between inequality and intergenerational mobility, sometimes dubbed as the “Great Gatsby's Curve". From a time series perspective, we analyze the relation between the increase in inequality and the observed trends in intergenerational mobility in the U.S. over the last three decades. As an empirical contribution, we document a significant increase in the intergenerational elasticity of earnings, both at the family level and at the individual level, between 1977 and 2012. However, we do not observe a significant trend in the intergenerational elasticity of family income, suggesting an important role for transfers in mitigating the impact of earnings inequality on intergenerational mobility.
Publication DateFebruary, 2106
Citation InformationCarlos Urrutia and Marina Mendes Tavares. "An Empirical Investigation on the Great Gatsby's Curve" Manuscript (2106)
Available at: http://works.bepress.com/currutia/12/